Tennessee Workers’ Compensation

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What can be covered by Tennessee Workers’ Compensation insurance?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.


To teach injured employees new skills if they can no longer do their jobs.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

Table of Contents

Is Tennessee Workers’ Compensation insurance required?

The Tennessee Bureau of Workers’ Compensation requires that you carry workers’ compensation insurance if you employ five or more people in your business. And if your business is in construction or a similar trade, you have to carry this coverage no matter how many employees you have.

Workplace injuries such as falls, breaks and cuts can happen to anyone. Even if your business is not required to carry workers’ compensation, you may benefit from the safety net it can provide for medical expenses and lost wages.

For example, a caterer injured on the job could face an emergency trip to the hospital, physical therapy, medications and lost income while she recovers.

A workers’ comp policy with business owner’s coverage could help cover her medical expenses and lost wages until she’s healthy enough to book new business again.

How does Workers’ Comp work in Tennessee?

If you purchase Tennessee workers’ compensation, you and your employees could receive financial help after a workplace injury for:

  • Emergency treatment
  • Medical bills
  • Lost wages
  • Death benefits

Additionally, employees who accept workers’ compensation benefits typically can’t sue their employer to pay injury-related expenses.

Proof of coverage can also help you gain work with some clients. Many businesses require all contractors to carry basic business insurance, including workers’ compensation.

Workers’ comp coverage might also be required for a professional license.

For example, to meet the general contractor license requirements in Tennessee, contractors must have general liability insurance and workers’ compensation insurance unless they can prove they’re exempt.

After suffering injury or illness on the job, employees may be eligible for benefits if:

  • A doctor recommends the employee refrain from working temporarily.
  • A doctor temporarily limits the hours the employee works.
  • The employer reduces the employee’s wages due to a work-related injury.

Tennessee workers’ compensation settlements are either:

  • Medical benefits, which include emergency care and follow-up appointments, physical therapy and other services related to the work injury. In Tennessee, there’s no maximum for medical benefits paid out as part of a workers’ comp claim.
  • Partial wage replacement, which includes the following benefit calculations:
Temporary disability, which can be:

Temporary partial disability (TPB), when the worker is placed on “light duty” or other restricted work while healing.

Temporary total disability (TTD), when the employee can’t work at all while healing.

Wages while an employee heals from injury110% of usual wages
Permanent disability, which can be:

Permanent partial disability (PPD), when the employee has a permanent disability but can still do some work. Permanent total disability (PTD), when the employee has a permanent disability that prevents them from working at all.

A permanent disability designation generally occurs after an employee is released from treatment.

Wages if employee can no longer work100% of former wages
Death benefit (burial)If an employee dies due to the incidentUp to $10,000 for burial expenses.

Wage replacement benefits depend on the surviving family:

  • A spouse with no dependents could receive 50% of the worker’s average monthly wages.
  • A surviving spouse with one or more dependent children could receive two-thirds of the worker’s average monthly wages.
  • If no dependents, a lump sum of $20,000 is paid to their estate.

Source: TN Department of Labor & Workforce Development Compensation Rates

Employers who do not comply with Tennessee workers’ comp laws can be subject to a fine.

The amount of the fine depends on how much a policy would have cost based on the state’s analysis of your risk. It may also depend on how long the business went without coverage, and it could be higher for certain industries, such as construction.

Learn more about workers’ compensation coverage.

How much is Workers’ Comp in Tennessee?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do
  • Total payroll
  • Your insurance claims history
  • The locations where you do business

The best way to determine the insurance rate for your business is to get a free instant quote from NEXT.

Who is exempt from Tennessee Workers’ Compensation insurance?

Although many businesses are required by law to have workers’ comp insurance, some are eligible for a Tennessee workers’ compensation exemption. This segment includes sole proprietors, partners in a business and members of an LLC.

While workers’ compensation insurance may not be mandatory for everyone, without it medical expenses and the cost of lost wages due to a workplace injury would need to be paid out of pocket.

How NEXT helps Tennessee small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you if a workplace injury impacts your business.

Get Instant Quote

Other important business insurance policies in Tennessee

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many Tennessee small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

Commercial auto insurance covers your business in case of accidents, injuries, or property damage while driving for business purposes.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance

Professional liability insurance, also called errors & omissions insurance, provides financial protection against claims of professional mistakes and negligence.

Learn more about commercial property insurance.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.